China In Eurasia

A flurry of high-stakes diplomacy -- with growing calls by Western officials for China to use its influence to pressure Russia to end its war in Ukraine -- has shifted the focus on Beijing's role as a potential mediator in the crisis.

The conversation for China to take the diplomatic mantle accelerated following a March 5 statement by Ukrainian Foreign Minister Dmytro Kuleba in which he said he had received assurances that "China is interested in stopping this war."

"Chinese diplomacy has sufficient tools to make a difference and we count that it is already involved and that their efforts will be successful," he said.

The statement from Kuleba was echoed by Western officials, such as Australian Prime Minister Scott Morrison, who called on China to join the effort to stop the conflict, and European Union foreign policy chief Josep Borrell, who told the Spanish newspaper El Mundo that Beijing could be a mediator in helping to find a diplomatic solution.

"We [Europeans] cannot be the mediators, that is clear.... And it cannot be the [United States] either. Who else?" Borrell said during the March 5 interview. "It has to be China, I trust in that."

While Beijing's potential role in brokering peace is under the spotlight, in large part due to its close ties with the Kremlin, some experts and diplomats have questioned China's credentials, motivation, and levers for influence to mediate and push for a diplomatic solution for the war.

"China is unlikely to play any serious mediating role in Ukraine," Ryan Hass, a Brookings Institution senior fellow and former director for China on the National Security Council, told RFE/RL. "At most, it may seek to burnish its diplomatic credentials by masquerading as a reliable channel, even as it continues to lean toward Moscow."

China's Diplomatic Dance

With doubts about Beijing's willingness to lean on Moscow, the EU appears to be focusing on pressuring China to use its influence with Russia to help broker a cease-fire and bring Moscow to the negotiating table, with Borrell speaking about the issue on March 7 with Chinese counterpart Wang Yi.

"China has the potential to reach out to Moscow because of their relationship, and we’d like China to use its influence to press for a cease-fire and make Russia stop the brutal, unprecedented shelling and killing of civilians in Ukraine," a European Commission spokesman said on March 7.

Beijing has built warm ties with Russia over the years, which were reaffirmed during a February 4 meeting between Chinese President Xi Jinping and Russian President Vladimir Putin at which the two leaders declared a “no limits” partnership.

SEE ALSO:

New World Order Or Hidden Power Struggle? Experts Assess The Future Of Chinese-Russian Relations

China has tried to distance itself from Russia's offensive since it started on February 24 -- especially as the Kremlin shifted tactics and civilian areas were targeted -- while avoiding any criticism of Moscow.

China has refrained from calling the war an "invasion" and said it recognized the "legitimate security concerns" of Russia. During a March 7 press conference, Wang referred to China's relationship with Moscow as "rock-solid" and hailed future prospects for cooperation.

At the same time, Beijing has tried to edge slightly away from Russia in statements, speaking about its "unwavering support for Ukraine's sovereignty," while adding that China is ready to make "every effort to end the war...through diplomacy." It has also expressed "regret" about the military action and concern for civilian casualties, signaling it could play a role in trying to broker a cease-fire.

"China still wants to occupy an in-between, gray area that allows it to keep relatively good relations with all parties," Francesca Ghiretti, an analyst at the Berlin-based think tank MERICS, told RFE/RL.

"The statements from Beijing have been rather consistent throughout.... At the moment, there is little to gain for China out of the role of mediator."

Some Western officials are hoping that, by adding public pressure on Beijing and calling its global image into question, China will shift its calculus.

During a visit to Lithuania on March 7, U.S. Secretary of State Antony Blinken accused Beijing of hypocrisy, saying that, despite its rhetoric about "upholding the international order, stability, and respecting sovereignty," it still stood behind Moscow and that its "actions are speaking much louder than its words."

SEE ALSO:

Putin's Escalation In Ukraine Leaves China Walking A Diplomatic Tightrope

Despite the recent push on China, little progress seems to have been made.

An EU diplomat familiar with the issue told RFE/RL that there was currently nothing concrete about formal mediation involving China, despite the outreach from Brussels.

"Everybody who reaches out to Putin is welcome to do so," the diplomat said. "So far, he has not shown nor expressed to anyone any readiness to enter into any negotiations [or] mediation."

If Not A Mediator, Then What?

China and Russia have been drawn together by a shared antagonism toward the United States and a desire to push back at what they feel is Western pressure targeted against them.

While many experts and former officials say Beijing is highly unlikely to drop Moscow as a partner, they acknowledge that Russia's invasion of Ukraine and the human and political crisis it has caused does not sit well with China and that Beijing is currently recalibrating its position.

"China may have believed that this conflict was in its interests because it had the potential to distract the United States and sow transatlantic division," the Rhodium Group's Noah Barkin told RFE/RL. "Instead, it has brought the EU and [United States] closer together and triggered a foreign policy rethink in Europe that could boomerang on Beijing."

Citing a Western intelligence report, The New York Times reported that Chinese officials told their Russian counterparts in early February not to invade Ukraine before the end of the Winter Olympics in Beijing, though it was not clear whether Putin told Xi directly of any specific war plans for Ukraine.

Chinese officials rejected the report as "pure fake news," but it highlights the reputational and strategic risks that Beijing faces as it looks to save face with its public tethering to Russia and trying to shield itself from blowback to Moscow's invasion of Ukraine and its rising civilian death toll.

"Either Beijing misjudged Putin and the effect his attack on Ukraine would have on Western resolve, or it judged that the long-term benefits of this conflict would outweigh the short-term risks," Barkin said. "What seems clear is that China will have to start recalibrating its rhetoric soon or run the risk of losing Europe. Ukraine could well be a tipping point for EU-China relations."

This leaves Beijing with a difficult balancing act.

Chinese policymakers are wary about U.S. pressure in the Indo-Pacific region that could impede its continued global rise and they still see Russia as a needed partner in any future confrontation. But the fallout from Moscow's invasion is already proving to be a strategic headache for China.

According to Hass, who oversaw China policy on the National Security Council under U.S. President Barack Obama, "Beijing seems committed to sticking closely with Moscow" but there are still roles short of being a peace broker that China could be willing to play to help stabilize the situation in Ukraine.

"The United States and others would be best served engaging Beijing on discrete issues where China could make a constructive contribution," Hass said. "[Such as] humanitarian assistance to Ukraine, avoiding backfilling global sanctions on Russia, and not standing in the way of global efforts at the UN to ensure future accountability for [Moscow]."

With Russia's economy in freefall as it feels the weight of a wave of unprecedented sanctions from the West, could China provide economic support to Moscow?

So far, the answer appears to be "no."

Although Chinese President Xi Jinping and his Russian counterpart, Vladimir Putin, have built strong ties in recent years in the face of Western pressure and Beijing has criticized the West's use of sanctions against Russia, China has not stepped in to help Moscow.

The Asian Infrastructure Investment Bank (AIIB), a Chinese-led development bank, suspended all business with Russia and Belarus on March 3, a possible sign of the limits to Beijing and Moscow's relationship. Similarly, the Shanghai-based New Development Bank also suspended business with Russia the same day.

SEE ALSO:

Putin's Escalation In Ukraine Leaves China Walking A Diplomatic Tightrope

Economic ties between the countries, however, have strengthened in recent years, with bilateral trade soaring to turn China into Russia's largest trading partner as the countries sought to deal more in Chinese yuan, which is outside the U.S.-dollar financial system.

According to a Reuters report, Russian firms are also rushing to open Chinese bank accounts in hopes of circumventing the worst economic pain brought by sanctions, while the Financial Times reported on March 4 that investors are increasingly betting on Beijing boosting trade with Russia to soften the blow from sanctions.

But could Beijing extend a financial lifeline to Moscow -- and more crucially, would it be willing to?

To find out more, RFE/RL spoke with former U.S. Treasury official Peter Piatetsky, who is now the CEO of the consultancy Castellum.AI.

RFE/RL: What role could China play in supporting Russia's economy? We have seen some headlines about oil and wheat and there has been a push in recent years to sign deals in Chinese yuan, leaving them outside the U.S.-dollar-based international financial system. What options are on the table for Beijing?

Peter Piatetsky: Beijing has all the cards here and it's a very bad situation for Russia because Russia is a net exporter, but it doesn't have that many different exports -- minerals, diamonds, [uranium, wheat], but primarily oil -- and Europe is its main destination for oil.

China could buy up that extra oil, but it does not seem to be willing to and Russia's main external trading relationship is with China. However, China's main external trading relationship is with the United States. So what we've seen so far is that China has been very quietly enforcing U.S. sanctions.

A very good example we can look at is [sanctions] against North Korea and Iran. China essentially designated certain banks that aren't [integral] to the economy that can work with Iran and North Korea, and if they get sanctioned then that's an [acceptable] loss, but they're trying to not expose the broader [Chinese] economy.

China can essentially do one thing here, which is to buy more Russian goods, but they don't seem to be willing to do that and Russia doesn't have that many different goods that China is willing to buy.

The relationship between Russia and China is very transactional. It's not an ideology-based relationship. They both dislike the United States and dislike the U.S.-led world order, but aside from that, I don't think there's much there.

RFE/RL: Now that we've talked about the issue of what could be possible, what about the possible? Given the sanctions packages put forward against Russia, how likely is China to move forward on helping out the Russian economy as it goes into a tailspin? What scenarios seem likely in your mind?

Piatetsky: Really, with the exception [of] energy and wheat, which haven't been touched [so far] because those are Russian exports that also go to Europe, there really aren't that many options.

If we were to say specific ones, [they] would be to buy more Russian goods and extend loans to Russia. But [both] of those are essentially loss-making propositions for China and so what we're really talking about is what is the size of [an] aid package [to Russia from China] that could help.

I think if [China] were to do something it would probably be to buy more oil [and] extend various loans; but Russia, again, just does not produce that many different goods that China is going to want to buy.

RFE/RL: It sounds like you're not bullish on this idea that China is going to swing to Russia's rescue in some way and extend a financial lifeline?

Piatetsky: I think that's not going to happen [and] I would encourage people to put themselves in China's shoes here.

Why would they do that? China benefits from an economically weaker Russia. China does not have Russia's best interests in mind. They're not going to be interested in an economically stronger Russia that can throw its weight around, they don't like that.

China simply doesn't have the incentives to do it. If it did have the incentives, it wouldn't have a lot of ways short of providing massive loans, and those massive loans would essentially be aid -- and I think China doesn't want to do that. Russia [also] doesn't want to be seen as just receiving aid, they still want to be seen as strong.

RFE/RL: How do you see the economic hit from Russia affecting the wider region, especially across Central Asia and the Caucasus, which have deep ties to Russia's economy?

Piatetsky: For Central Asia, this is an absolute disaster, a lot of those economies are heavily remittance-dependent and with Russians losing money and Russians losing jobs, there are going to be less jobs all around.

There's not going to be any protection for Central Asian migrants that are losing jobs, many of [which] are unofficial. So, you're going to see Russians losing jobs [and] Central Asians will lose those jobs much quicker -- so will Georgians -- and the remittances that they were sending back to their home countries will also fall.

SEE ALSO:

Central Asia Takes Economic Hit From Russian War In Ukraine Sooner Than Expected

So, I would say Central Asia is definitely in for an extremely difficult time economically.

RFE/RL: Does that place China in a position to benefit? China has already been a growing force in this part of the world, is it well positioned to pick up the pieces, so to speak?

Piatetsky: The short answer is yes.

Like [U.S. President Joe] Biden said, Putin has badly miscalculated and I think those photos where you see him 20 feet away from his advisers, most of which are "yes men," shows the quality of the advice that he's getting.

He's had the unintended effect of rallying Europe and pushing the EU, potentially, into ditching Russian energy.

Putin has [also] tremendously strengthened [China]. China has the option now of either giving some sort of economic lifeline to Russia, which is unlikely, but if it did, it would make Russia [even more] dependent on China.

RFE/RL: Moving beyond countries like China, are there any other forms of relief or options on Moscow's table that can help lessen the hurt that has already hit and will be coming in the future?

Piatetsky: Stop the war, it's really that simple.

This is financial nuclear war and the level of sanctions that have been imposed on Russia are potentially more than what has been imposed on Iran, and this has occurred over the course of two weeks. Whereas for Iran, it occurred over the course of about 10 years.

So this is by far the largest sanctions event in history and it's being imposed by a global united front. You have not just the [United States] and the [EU], [but] you have Canada, Japan, Australia, and South Korea -- really every country with an economic hammer is using it -- and China is not coming to Russia's rescue.

[Short] of stopping the war and acceding to Europe's demands, there's not much they can do economically.

This doesn't mean Russia will have societal collapse and this doesn't mean that Russia will roll over [to Western demands]. Neither has North Korea or Iran, but what Russians are going to see is less income, less opportunities, less travel, [and] less goods.

Everything about living in Russia is about to get worse, and it's about to get worse for a long time, and it will continue to be essentially until Europe is willing to lift the sanctions.

Interview edited and condensed for clarity